Online pet retailer Chewy is adding to its private brand assortment with its first entry into the fresh and prepared pet food space.
The retailer has launched Tylee’s, a line of fresh-prepared, human-grade meals that are frozen and shipped to shoppers. The company said the meals are grain-free and rotational with different flavors for lunch and dinner. Additionally, there are jerky snacks under the Tylee’s name.
Every batch of food is prepared in a human-grade facility in the U.S., following strict safety standards. The food can be eaten alone or used to top kibble. The retailer has a video on the exclusive item on a brand page.
Chewy announced the new launch in its first-quarter shareholder letter, saying the company’s highly trained and best-in-class customer service team, coupled with its personalized search and discovery features, make Chewy the right platform to drive customer adoption in the fresh meals category.
In the fresh category, Chewy said it developed (and patented) new sustainable packaging that enables the company to preserve product quality throughout the delivery process. “We are currently in Beta mode and will soon launch initial distribution in three geographies covering approximately 60% of Chewy’s customer base, and we intend to grow both our fresh catalog and expand geographic distribution as we scale this business. We are enthusiastic about the fresh and prepared foods category and the opportunity to serve new customers and expand assortment choices for our existing ones,” Chewy wrote in the shareholder letter.
The company enjoyed a strong first quarter as well, including for its proprietary brands, which helped the company experience a 27.6% increase in gross margin, per the shareholder letter.
Chewy said in the quarterly report that its proprietary brands, hardgoods and pharmacy services collectively grew net sales by nearly 52%. Net sales landed at $2.14 billion, a year-over-year increase of 31.7%. Adjusted EBITDA increased to $77.4 million for the quarter. Net income was $38.7 million, including share-based compensation expense of $24.8 million.
“2021 is already turning out to be an exciting and busy year for Chewy. We continue to execute against our growth roadmap, expand our customer base, increase share of wallet, and grow our addressable market-expanding verticals,” said Sumit Singh, CEO, Chewy. “I am incredibly proud of the determination and focus of our teams and their ability to accelerate our pace of innovation on behalf of our customers, while consistently delivering strong top-line and bottom-line results for our shareholders.”